A total mess... isn't it illegal to rent a property that is in fact for sale?

[J-Renter]

This is a doosy... We signed a one year lease on a property in October 2010. The Landlord assured us that the property was not for sale and he had no plans to sell it. Turns out, the Landlord lost title to the property in a recent divorce, so it seems to be we are leasing a property from someone who doesn't own it in the first place. (He's listed on the lease as "Fee Owner" - and we understand that the ex-wife got ownership and title of the properties, but he got the rental income... ahhhh, divorce...). As if that's not bad enough, he has (had) two properties on a 4 lot spread - ours being one. The one we aren't living in has gone into foreclosure, and ours is soon to follow it would seem. However, the well water we get is diverted from that property to the one we are in. And that property uses the septic from the lot adjacent to it. And they (the ex-wife and her real estate agent) are now trying to sell all of the properties. There are water taps, but they aren't active.

Questions: First, isn't it illegal to rent a property that is in fact for sale (we discovered after signing the lease that it was in fact listed on the MLS) without disclosing that to the Tennants in the lease?

What happens with our water if someone purchases the other property and pays the water tap fee and shuts off the well?

If we signed a lease with the reasonable expectation of being here for the term of the lease, isn't the landlord breaking the lease by selling the property (unless of course it gets sold to an investor who is happy with it already being rented out. But what if that's not the case)?

Since our lease is not with the actual owner at this point, does any of that matter, and are we simply out of luck?

Do we have any recourse here?

[Lexus]

From the facts it could understand that your landlord suppressed the fact that the building was kept for sale. It is also understood that he had ownership at the time of signing the agreement. The LL tenant relations will depend on the terms of the agreement. As the husband was the owner at the time of signing the agreement, he could not wash out his hands at this stage. He is legally bound to give you alternate arrangements or he has to compensate you. It seems that as he lost the ownership the agreement will be invalid. If he was aware of the fact that the house was meant for sale and that fact didn’t disclose to you then he will be answerable to the fraud played on you. You can file a suit against the husband claiming compensation. It is also advised that you may consult with an Attorney who is dealing with property matters before you initiate any legal proceedings.

No. It is not illegal to rent a property that is also for sale.